Not a passing storm

Perhaps the ‘perfect storm’ metaphor is overused. But it’s an apt description of the forces converging on higher education these days. Graduation rates for most institutions remain stubbornly low; employers chronically complain that those who do graduate don’t know what they need to know or have the skills jobs require.

Meanwhile, college costs continue their relentless rise — exceeding over the past three decades even the increases in health care costs. Into this supercharged atmosphere now emerge serious online offerings. Once considered marginal, quaint and not very good, the online option has almost suddenly burst into the market as a major disruptive force.

It’s easy to find professors dismissive of this trend. And in Minnesota’s outstanding community of private colleges and universities, there may remain a rationale for high confidence — for a while. You don’t worry much when your institution is doing well.

Here’s the reality: education — including and maybe especially its higher forms — is the last of the ‘old media’ to be disrupted. The disruption is following a familiar path — starting as not so good, appealing first on affordability or convenience, then getting better and ineluctably grabbing market share.

Skeptical? Let’s start with one word: Kodak. In rich historical irony, Kodak scientists actually invented the digital camera in 1975. But Kodak executives, keenly aware that the company’s profits came primarily from selling film, waved the scientists away. In Helsinki last summer, I was told that engineers at Nokia went to management a decade ago with a product design that almost eerily presaged the iPhone (which didn’t emerge until 2007). Again, executives dismissed the engineers with the reminder that the company was doing quite well selling its phones. Well, you know how these stories ended.

It’s precisely when organizations are doing well, succeeding in their field, that they seem more susceptible to the forces of disruption.

So is Minnesota higher education a fortunate exception? Likely not. Minnesota, accustomed for a long time to leading the nation on multiple fronts, actually did lead the nation over the last decade — in disinvestment in higher education. According to some, state investment went down as much as 48% on a per student basis.

A half-century back, Minnesota was an early mover on access to college and got institutions set up all over the state. The idea was to give every student a shot at getting a good college education without moving from home. Well, that is fast becoming an easy proposition — without leaving home at all. Online learning, following the classic pattern of disruptive innovations, is now moving from its early stages to something truly consequential.

If you’re not yet convinced, that’s not mysterious. The online platform for higher education today is about where digital photography was, when all you could buy was a 1.3 megapixel device. Just think back on how fast digital got better. And think then about what truly great learning online is going to do to the undergraduate market (a major revenue machine for many institutions).

Ever since for Stanford University professor Sebastian Thrum and his colleagues offered the first Massive Open Online Course and saw 160,000 enrollments worldwide, assumptions about the future have taken a noticeable shift. And firms like Coursera and Udacity have formed, along with the EdX consortium.

Every college will soon have to answer this question: what is it that we offer that students need to be on campus to get?